Budget 2026: What does the Budget mean for the property sector?

Formally announced was the Government’s new Your First Home scheme, designed to make getting onto the property ladder more achievable. Replacing the previous ‘Help to Buy Scheme’ scrapped in March 2023, this new scheme will allow eligible first-time buyers in England to purchase a qualifying new-build home with a deposit of just 2.5%.  This will be supported by a government-backed equity loan of up to 20% of the property’s value, which will initially be interest-free. 

For those buyers not fortunate enough to have the ‘bank of Mum and Dad’ this could significantly reduce the amount buyers need to save before purchasing, while potentially lowering monthly mortgage repayments compared with a traditional 95% mortgage. It could be particularly beneficial for those who have a stable income but struggle to build a large deposit (while renting or at university) or cannot rely on financial help from family. As always this will be subject to income limits (£140,000 per household in London and £110,000 elsewhere), regional property price caps (£650,000 in London and £500,000 elsewhere) and eligibility criteria (details of which we await). This represents a positive step towards making homeownership more accessible and helping more first-time buyers turn the dream of owning their own home into a reality. 

There has been some criticism that the scheme would only apply to new build housing with some suggesting it could, and should, apply to any property being purchased by a first-time buyer, whether new build or not. Whilst full details are awaited, nothing in today’s budget suggested that this would apply. 

The Government has also announced a new First Time Buyer ISA, to replace the current Lifetime ISA scheme from April 2029. As now, this will offer a government bonus for first time buyers but this time without penalty for withdrawals where the purchase price of the property exceeds certain limits (though the level of bonus will no doubt be affected). It is not clear whether first time buyers with existing Lifetime ISA’s will be able to transfer those to the new scheme but for those on the existing scheme, the withdrawal penalty where a property is purchased over the existing price caps will reduce from 25% to 20%, effective from 29th October. 

There was also some relief for property investors and landlords that the rates of Capital Gains Tax (CGT) have not been changed. Until quite recently, it was thought CGT rates might be raised in line with the rates of income tax. Recent press reports had suggested that this would not be the case and there will have been not a few sighs of relief that this has now been confirmed. 

However, it is far from all good news for landlords. John Healey announced a further 2% on income from property; added to the 2% hike introduced by his predecessor, Rachel Reeves, last November, this means that landlords will face tax rates of 24%, 44% or 49% from April 2027. For a sector that has had to deal with the major changes introduced by the Renters Rights Act, this will be far from welcome and has prompted some commentators to reflect that this could lead to a further decrease of private landlords from the market.

If you are looking for more information you can contact Adrian Whichcord or one of the property team on 0208 290 0440.